The Top 20 Most Popular Verticals to Start Companies In

There is incessant talk about and guesses as to what’s popular, where are entrepreneurs starting companies and what’s the next big thing – bitcoin, hardware, drones? And then there is the disappointment in entrepreneurs for just wanting to start local/mobile/social apps. Peter Thiel lamenting that, “We wanted flying cars and instead we got 140 characters.” But we’ve we’ve really never seen where founders’ interests lie and how it’s changing – until now. We took the verticals that FounderDating Network Cofounder members (those members who have indicated that they are interested in finding cofounders) selected as markets they are interested in started a company in and compared the last six months with the same six months one year ago. Here’s what we found:

The Top 20

Music, Sports and Games fell out of the top 20. They were ranked 16, 19 and 20 respectively over the same six months a year ago.

Longevity

Mobile’s staying power is no huge surprise, but several other verticals have they consistently landed in the top 10:

Commerce

Small Business

Advertising – surprising but it does power the web (need quote here)

Cloud Services

Enterprise Software

Rise and Fall

Data and Analytics, Travel and Payments all dropped in rank fairly significantly. While enterprise software proves it’s sexy again. But the biggest trend by far is hardware. Despite warnings that it’s the “double black diamond of startups” entrepreneurs are excited about hardware-focused verticals. In fact, aggregating all of the hardware-related verticals together it becomes the #1 vertical, compared to the #3 position one year ago. Being lead by:

Wearable Tech +17

Smart Home +13

Consumer Electronics +10

In addition to the points Jon Callaghan makes, it’s become more possible to fund and find early customers thanks in part to indiegogo and Kickstarter. Add to that entrepreneurs (and investors) seeing exits happen (Nest/Dropcam/Oculus) and that plants the seed of possibility.

Biggest Surprises

I’ll be honest I was surprised (pleasantly so) to see social impact ranking so high consistently. At #2 and #3 previously, it beats out everything but mobile. This doesn’t necessarily need to be non-profit projects and companies but entrepreneurs want to make an impact. On the opposite side of the spectrum, advertising’s popularity proves the love/hate relationship consumers have with advertising endures and remains important.

Caveats

It’s true, this categorization is fairly broad – payments doesn’t break down into bitcoin, NFC, etc. which means there are are other trends that we may not be spotting. Of course these numbers are based on the entire cofounder network population. Once you break it down by primary skill set (e.g. engineering, design, product) there are more nuances. But we’ll leave that for the next post…

For now, it seems entrepreneurs are moving in the right direction, tackling hard problems – or at least not only social and local apps.